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A call option is currently selling for $4.30. It has a strike price of $35 and five months to maturity. The current stock price is $37, and the risk-free rate is 3.8 percent. The stock will pay a dividend of $1.65 in two months. What is the price of a put option with the same exercise price? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Price of a put option $
You have a line of credit for $1,000,000 at 4% for six months from Bank of America. You need to borrow 10,000,000 Mexican Pesos for six months. The spot FX rate is 13 P/$ and the 6-month forward rate is 13.25 P/$. All interest rates are quoted on an ..
Marginal Cost of Capital The McGee Corporation finds it is necessary to determine the firm’s Marginal Cost of capital. McGee’s current capital structure calls for 40% debt, 5% preferred stock, and 55% common equity.
Find the 3 weights to be used to determine the cost of capital (Debt, Preferred, and Common equity weights) using market value and book values. Find the component costs (%) for bonds (rd), preferred stock(rp), retained earnings(rs) and new issue comm..
A bond has 5 years to maturity and has a YTM of 8%. Its par value is $1,000. Its semi annual coupons are $50. What is the bonds current market price?
Martha's Enterprises spent $2,500 to purchase equipment three years ago. This equipment is currently valued at $2,000 on today's balance sheet but could actually be sold for $2,200. Net working capital is $300 and long-term debt is $900. Assuming the..
Sensitivity Analysis and Break-Even Point We are evaluating a project that costs $836,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. What is the sensitivity of OC..
A company has a before tax cost of common equity of 14%, a pretax cost of debt 6%, a cost of preferred equity 8%, and a marginal tax rate of 34%. The current market value of the company is $150 million, with $75 million common equity, $50 million deb..
An unlevered firm, Marshall Inc., has a constant EBIT of $1,500,000 per year in perpetuity. It is considering the use of some debt financing to repurchase shares. What is Marshall’s market value and the WACC before any debt is taken on? In M&M’s case..
Financial Management (FIN5FMA) - Determination of the cost of the various sources of costly (interest-bearing) financing used by the firm and, based on this information, Fortescue Metals Group Limited's overall weighted average cost of capital (WA..
List the four factions that emerged in response to foreign influences on Hebrew ways at the time of the Second Temple. Describe in detail the thinking of one of the factions.
At an output level of 53,000 units, you calculate that the degree of operating leverage is 3.21. If output rises to 57,000 units, what will the percentage change in operating cash flow be? Will the new level of operating leverage be higher or lower? ..
Your bank is looking for the lowest cost two year, fixed rate financing. It has decided to issue four consecutive three month Eurodollar time deposits on balance sheet and hedge the future borrowing costs by taking positions in the market for basic i..
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